The Snitch

With the news of job cuts rampant in the dailies recently, it’s no wonder everyone is feeling the jitters.

Conrad Raj from Today posed an interesting question regarding DBS’s decision to lay off 900 people, or 6% of its total workforce by end of November. “Could the lay-offs have been avoided? What other measures did the group look at before deciding to take the present drastic action?”

Citing UOB’s response to use job cuts as its last resort in surviving the global economic downturn, Raj questioned if DBS Bank’s management could have re-deployed their cost-cutting measures in other ways to protect jobs.

While laying people off is the easiest way for most banks to achieve cost reductions, according to an article by Times UK, it can disrupt the staff morale, which in turn affects the quality of service provided to the customers.

Instead, to keep companies afloat during the economic turmoil without retrenching anyone, the article suggests introducing pay cuts for both senior and junior employees.

However, it warns that pay cuts should be considered only when every bit of waste has been trimmed out of the organisation and the only remaining option is layoffs. “It has to be top down. It should not be imposed on other people while the top guys still take home the same pay.”

Similarly, companies can start using flexible work options as cost saving and retention measures before considering job cuts, as urged by the chairperson for Employer Alliance, Claire Chiang in a recent Human Resources online article. “Maybe you could cut hours, rather than cut people. You are staggering the time so that they can take the leave and yet come back if they wish to. Overall, you keep the talent.”

From the employee’s perspective, Chiang said, “They may take a little less [pay] but it is better than no job.”

With our Finance Minister, Tharman Shanmugaratnam quoted as saying the economic downturn is unlikely to be short term, perhaps it is time for multinationals to rethink their human capital strategy before swinging the axe.